Labor Code § 90.5(d) requires the Labor Commissioner to report annually to the
Legislature concerning the effectiveness of the Bureau of Field Enforcement (BOFE). This
report shall include: (1) the enforcement plan adopted by the Labor Commissioner and the
rationale for the priorities, (2) the number of establishments investigated by BOFE, and
the number and types of violations found, (3) the amount of wages found to be unlawfully
withheld from workers, and the amount of unpaid wages recovered for workers, and (4) the
amount of penalties transferred to the General Fund as a result of the efforts of BOFE.

BOFE investigates complaints and takes enforcement action to ensure employees
are not being required or permitted to work under unlawful conditions. Enforcement action
taken by BOFE involves the enforcement of child labor laws; the requirement of employers
to carry workers compensation insurance coverage; audits of payroll records,
collection of unpaid minimum wages, overtime, as well as prevailing and other unpaid
wages; the issuance of civil and criminal citations; and the confiscation of illegally
manufactured garments, and injunctive relief to preclude further violations of the law.

The Labor Commissioner has maximized enforcement efforts through the use of
multi-agency enforcement programs operating within BOFE. These programs are designed to
focus enforcement on those employers committing flagrant violations or operating in the
underground economy. The Labor Commissioner is intent on giving the economic advantage
back to the law-abiding employer, and to protect workers from unlawful labor practices.
These multi-agency programs are specifically, the Targeted Industries Partnership Program
(TIPP), which is a joint enforcement and educational effort between the Labor Commissioner
and its sister agency within the Department of Industrial Relations, the Division of
Occupational Safety and Health (Cal/OSHA), the California Employment Development
Department and the U.S. Department of Labor, Wage and Hour Division. The second program is
the Joint Enforcement Strike Force (JESF), whose members include the Labor Commissioner,
the Employment Development Department, the Department of Consumer Affairs, the Office of
Criminal Justice Planning, the Department of Justice, the Franchise Tax Board, and the
Board of Equalization.

During the past year, investigators in BOFE have concentrated their efforts in
industries with histories of labor law violations, as well as industries that tend to
operate in the underground economy. Specifically, BOFE, including the TIPP and the JESF,
has focused on enforcement activity in such industries as garment manufacturing,
agriculture, automotive repair, and bars. In the 5,689 inspections conducted during 1997,
the greatest number of violations found involved failure to carry workers
compensation insurance coverage, resulting in 1,381 citations. Investigators also issued
740 citations for violations relating to garment manufacturing registration requirements
and 661 citations for paying employees in cash without the required itemized wage
deduction statement.

In 1998, the Labor Commissioner created a rapid reaction Strike Force, composed
of several experienced labor law investigators, to deal with major, fraudulent labor law
violations in any industry. The Strike Force is currently investigating employers involved
in the construction and garment manufacturing industries.

During 1997, the TIPP garment enforcement program continued

to target the underground economy, which has been a priority of the governor
since 1991. Some of the innovations used by TIPP that were specifically employed to target
the illegal activities of the underground economy were:

In 1997, the Division installed a statewide hotline for the garment industry so
that employers and employees could report suspected violations to TIPP. This focus on the
underground economy resulted in 198 confiscations of garments that were illegally
manufactured. The total value of these confiscated goods amounted to $1.5 million.
Further, expansion of TIPP investigations into restaurants and the construction industry
is planned for early 1998.

TIPP, in an effort to measure the level of compliance in the apparel industry,
has conducted three surveys. The first survey in 1994 was conducted to establish a
baseline. The 1994 survey included firms from throughout the state. The 1996 survey was
focused on firms located in Southern California, and the 1997 survey was conducted on
firms located in Northern California. These surveys have demonstrated that the level of
compliance have improved since the baseline survey. The 1997 survey indicated that there
were improvements in all categories of labor law violations. The greatest improvements
were in the areas of cash pay, recordkeeping, and posting requirements. In recognition of
its considerable accomplishments, in 1996 TIPP received the prestigious national
Innovations Award from the Council of State Governments.

In addition to enforcement of specific Labor Code statutes and provisions of the
Industrial Welfare Commission (IWC) wage orders, BOFE investigates complaints arising from
violations of the states prevailing wage laws, and conducts payroll audits on behalf
of Californias workers for back wages owed. During 1997, BOFE recovered
approximately $5.8 million in wages, and also recovered approximately $3.8 million for
workers on public works projects. In addition to collecting wages owed for underpayment or
non-payment of prevailing wages, BOFE collected over $3,378,776 in civil penalties for
wage and public works violations.

Taken together, the multi-agency joint enforcement programs, the ongoing public
works regulatory activity and the educational and outreach efforts of BOFE have all served
to create an increasingly effective unit for enforcing the states labor laws for the
protection of Californias workers, and to ensure equal competition for all
law-abiding employers in the state.

In accordance with subsections (2), (3), and (4) of Labor Code § 90.5(d),
the following data is presented to demonstrate the effectiveness of the field enforcement
unit during 1997:

Number of Establishments Investigated

5,689

Total Number of Citations Issued for Labor Law Violations

3,207

Workers Compensation Insurance

1,381

Child Labor

256

Cash Pay

661

Minimum Wage

96

Unlicensed Contractors

73

Garment Manufacturing Penalties

740

Public Works (prevailing wage) Enforcement

Cases Opened

1,212

Cases Closed

979

Wages Recovered

$3,775,698

Penalties Collected

$1,206,610

Amount of wages recovered for workers * $9,574,090

* This figure denotes only wages recovered through BOFE and Public Works.
General wage claims filed with the Labor Commissioner are not processed through BOFE.

Amount of penalties transferred to the General Fund in Calendar Year 1997
$3,378,776